How does adverse selection affect the insurance market?
High risk persons are more likely to apply for insurance than low risk persons.
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The law of comparative advantage explains why
A. individuals choose specialized careers. B. firms specialize in the production of certain goods. C. nations develop strengths in certain industries. D. All of the responses are correct.
Suppose an individual were to win $1,000 in Las Vegas. The permanent-income hypothesis predicts that the individual would NOT be likely to
A) put his winnings in the bank. B) throw a party. C) buy a dishwasher. D) purchase some shares in a corporation.
Recall the Application about the supply of shipping services to answer the following question(s).Recall the Application. The short-run supply curve for shipping services is:
A. positively sloped. B. negatively sloped. C. perfectly vertical. D. perfectly horizontal.
Refer to the information provided in Table 33.2 below to answer the question(s) that follow.
Table 33.2
Refer to Table 33.2. The most that China will be willing to pay for a motorcycle is
A. 1/30 of a tractor. B. 1/20 of a tractor. C. 1/10 of a tractor. D. 1/5 of a tractor.